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COVID-19 to accelerate supply chain shift from Asian reliance, CMA CGM says

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The COVID-19 pandemic has shifted supply chain manufacturing focus away from Asian markets and to new economies in Tunisia, Turkey and Morocco.

The pandemic, which forced the closure of swathes of Chinese manufacturing factories in late 2019 and early 2020, had significant impacts on supply chain movement, and consequently the ports and shipping stakeholders that serve them.

During a TOC Asia event as part of Singapore Maritime Week on 23 April, Stephane Courquin, CEO of CMA CGM Group Asia, said the group is now anticipating manufacturers relocating factories further west closer to areas of consumption in European and North American markets.

“Because of COVID-19 we have come to realise the limitations of Just-in-Time (JIT) arrivals and stockholding practices,” Courquin told the webinar.

“We anticipate manufacturers and shippers to increasingly relocate their factories and regionalize their production flows as part of risk mitigation.

“As an intra-regional operator in Asia and South America, we are already seeing very sharp increases in this trend. This however does not imply the decline in purchasing markets from Asia. But having production markets closer to where products are consumed.”

Courquin continued that this has already been seen in the textile sectors, with developments in Tunisia, Turkey and Morocco.

“We saw this prior to the pandemic, and it is just accelerating. With such trends, we need to adjust and adapt, and develop our network according to cargo movement.”

Transparency and real-time information in cargo movement is a hot topic in ports and maritime to ensure maritime is resilient in playing its part in the supply chain.

Courquin noted that 90% of global trade is transported through shipping, therefore ports and shipping stakeholders must invest in digitalisation to better respond to black swan events like the pandemic in the future.

CMA CGM has recently adopted the Digital Container Shipping Association’s (DCSA) Track and Trace standards to provide  a streamlined way for shippers to receive real-time, cross-carrier data regarding the whereabouts of their containers.

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